Transformation is an emotive word that conjures up visions of a better world, clear goals, and clean outcomes. Yet surveys conducted over the past 20 years show that IT-based transformation is a high-risk game, with more than 70% of programmes failing to live up to expectations. This is even more worrisome when you consider the advance of specialist management tools needed to implement such change. While methodologies have spawned huge industries and consulting efforts, they have failed to make a noticeable dent in programme failure rates. Why is this? The cynics might say that having all these methods, with their certifications and associated consulting industries, has resulted in a culture that focuses on procedural compliance and ticking boxes. While this is part of the problem, there is a more fundamental issue.
All too often, IT alone is relied upon to provide transformation. In my experience, this does not work – whereas by focusing instead on technology as an enabler of transformation, the chances of success are much improved. Organisations should only implement technology solutions if they add value or improve processes for the benefit of the business. In simple terms – does the technology help to either reduce costs or increase revenue for the organisation? So why are organisations struggling with transformation? There is no single answer or simple combination of factors that can be applied to every transformation initiative. However, a number of themes are often present that must be addressed to minimise the risk of programme failure:
Transformation takes too long
The days of five-year business strategies are over. Many organisations struggle to create and execute annual business plans, and monthly targets are difficult to meet. Delivering a complex, enterprise-wide IT transformation programme over the course of several years quickly becomes irrelevant. Even breaking it down into artificially bite-sized drops of code has had limited success in recent years.
Transformation costs too much
In these austere times, the perceived levels of investment in technology exceed the means of most organisations. Also, operational staffing levels have been cut back to the minimum and calls to devote time to initiatives can be met with derision. Big budgets for multi-year programmes with uncertain returns are being challenged - and rightly so; transformation must deliver tangible benefits for all key stakeholders within months, not years.
Transformation leaves unfinished business
There is increasing evidence that many transformation programmes are closed down before the original goals have been realised. This can be a result of overspending, changing priorities, or simply ‘battle fatigue’. Many organisations have amassed a series of programmes that have only partially delivered what they set out to achieve, leading to
sub-optimal performance and inefficiencies.
ransformation needs a stable base
Standard processes are designed to address the ‘ideal’ way of working. It is often assumed that these standards and methods will be applied to stable, controlled environments. However, organisations that can truly operate at consistently high and repeatable levels of performance are in the minority. In reality, most are struggling to find and maintain their sweet spots. Applying transformation to fluid and chaotic organisations is fraught with problems.
Transformation activities have been outsourced
Many organisations have reaped considerable cost savings through outsourcing and offshoring. While this approach works well for stable operations, there can be a serious disconnect when a client needs to move quickly to meet changing market conditions. Too often, the outsourcing partner that operates the areas of business to be transformed is not well-positioned to respond to dynamic circumstances further upstream.
How should organisations respond?
In light of these challenges, and with the odds stacked against you, it may seem futile to embark on any future programmes. But transformation is still worthwhile, even essential, in these turbulent times. With simple steps, organisations can significantly boost their delivery of technology enablement programmes:
1. Invest time up front to simplify business processes.
Technology often provides a faster, cheaper way of doing the same thing, with little time or attention paid to finding a better way of working. The result is IT systems being contorted and distorted by illogical, unnecessary processes and bloated with volumes of irrelevant data. Instead, organisations should invest time early on to build more stable, efficient, and repeatable business processes that can be used as sustainable, flexible blueprints for
2. Challenge the technologists.
Technologists love to have the latest kit and are keen to demonstrate the benefits of upgrading or the perils of doing nothing. This has become one of the biggest traps for businesses. IT departments should provide stable platforms, supply basic functionality, and work closely with business functions to enable strategy and operations. Business managers must push back on technological ‘wants’ or capabilities that are not backed by sound return on investment - and instead invest time in exploiting existing technology more productively.
3. Think—and act—as an enterprise.
Technology allows businesses to capture vast volumes of data from everyday activities, and this has been fuelled by a substantial drop in storage price. By making data more accessible, the Cloud is quickly becoming a game-changer. But making sense of collected data is another matter.
In the world of Business Intelligence (BI), big data is relatively immature—particularly if organisations depend on spreadsheets to run their businesses. BI does bring value to organisations and has the potential to transform the quality and effectiveness of strategy and decision-making processes. The key is establishing ownership and accountability to ensure that data is complete, accurate, processed effectively, and used for maximum business advantage.
4. Take smaller, incremental steps toward the ultimate goal.
Technology programmes do not have the luxury of extended timelines to deliver benefits. Small, sure-footed steps that can be delivered within realistic budgets and provide tangible benefits in short order are essential. Businesses must develop and then break down their corporate strategies into incremental steps and actions. Tangible benefits will begin to appear in a regular, repeatable manner, month to month.
5. Get teams on board with new expectations and ways of working.
Employees may associate transformation programmes with changes in the way they work, which can build fear, resistance, and even resentment. The human interface with technology is critical. Too often, employees claim that technology stops them from doing the right thing or forces them to do something they feel is inefficient or wrong. Involve people in transformation programmes and ensure that their needs are understood and accommodated wherever possible.
Jon Kidd is a director of MorganFranklin Consulting and a former head of Global IT Applications Management at Barclays.